The Reserve Bank of India (RBI) announced today that the retail digital rupee will be launched on a trial basis on December 1, 2022.
The central bank has identified eight banks to participate in this trial in stages.
The retail digital rupee will take the form of a legal tender digital token. The RBI will print digital currency in the same denominations as paper money and coins.
Retail digital rupee transactions can be completed on mobile phones and other devices using a digital wallet. Only digital wallets provided by banks participating in the RBI’s digital rupee programme can conduct digital currency transactions.
Banks will distribute the retail digital currency. Person-to-person (P2P) and person-to-merchant (P2M) digital currency transactions are possible (P2M). QR (Quick Response) codes displayed at merchant locations can be used to make payments to merchants.
The retail digital rupee would have physical cash characteristics such as trust, safety, and settlement finality. It will not earn interest and, like cash, can be converted to other forms of money, such as bank deposits.
The retail digital rupee (-R) would take the form of a legal tender digital token. It would be issued in the same denominations as paper money and coins are now. It would be distributed via intermediaries, such as banks. Users will be able to transact with e-R using a digital wallet provided by participating banks and stored on their mobile phones/devices.
The first phase will begin with four banks in four cities across the country: State Bank of India, ICICI Bank, Yes Bank, and IDFC First Bank. Four more banks will join the trial later: Bank of Baroda, Union Bank of India, HDFC Bank, and Kotak Mahindra Bank.
The pilot will initially cover Mumbai, New Delhi, Bengaluru, and Bhubaneswar before expanding to Ahmedabad, Gangtok, Guwahati, Hyderabad, Indore, Kochi, Lucknow, Patna, and Shimla, according to the RBI.
